Financial Services and Markets Act 2000

[F1 Power to require FSCS manager to act U.K.

Textual Amendments

F1 Pt. 15A inserted (12.10.2010) by Financial Services Act 2010 (c. 28), ss. 17, 26(3); S.I. 2010/2480, art. 2(d)

224C Power to require FSCS manager to act on behalf of manager of relevant scheme U.K.

(1) This section applies if compensation is payable under a relevant scheme.

(2) The Treasury may by notice require the FSCS manager to exercise (on behalf of the manager of the relevant scheme) specified functions in respect of specified claims for compensation under the relevant scheme.

(3) A notice may be given only with the consent of the manager of the relevant scheme.

(4) In subsection (2) “specified” means specified, or of a description specified, in the notice.

(5) Claims or descriptions of claims may be specified by reference to the persons or description of persons whose claims they are.

224D Cases where FSCS manager may decline to act U.K.

(1) This section applies where a notice under section 224C(2) (a “section 224C notice”) has been given in respect of a relevant scheme.

(2) The FSCS manager is not under a duty to comply with the section 224C notice if, as soon as reasonably practicable after receiving it, the FSCS manager gives a notice to the Treasury stating that a ground set out in section 224E applies.

(3) Where a notice under subsection (2) is given, the FSCS manager may recover from the manager of the relevant scheme an amount equal to the total expenses incurred by the FSCS manager in connection with the relevant scheme in the period—

(a) beginning with the giving of the section 224C notice; and

(b) ending with the giving of the notice under subsection (2).

(4) The duty to comply with the section 224C notice ceases if, after starting to comply with it, the FSCS manager gives a notice to the Treasury and the manager of the relevant scheme stating that a ground set out in section 224E applies.

(5) Where a notice under subsection (4) is given, the FSCS manager must give the Treasury such information connected with the FSCS manager's exercise of functions in relation to the relevant scheme as the Treasury may reasonably require.

(6) Any notice under this section—

(a) may be given only if, before giving it, the FSCS manager has taken reasonable steps to deal with anything that is causing the ground or grounds in question to apply; and

(b) must contain details of those steps.

224E Grounds for declining to act U.K.

(1) This section sets out the grounds referred to in section 224D(2) and (4).

(2) The first ground is that the FSCS manager is not satisfied that it will be able to obtain any information required in order to comply with the section 224C notice.

(3) The second ground is that the FSCS manager is not satisfied that it will be able to obtain any advice or other assistance from the manager of the relevant scheme that is required in order to comply with the section 224C notice.

(4) The third ground is—

(a) that the FSCS manager has not received an amount at least equal to the total expenses it expects to incur in connection with its relevant scheme functions; and

(b) either—

(i) that there are no arrangements for the provision of funds to the FSCS manager to enable it to exercise those functions and meet those expenses; or

(ii) that the FSCS manager considers that any such arrangements are unsatisfactory.

(5) The fourth ground is that the FSCS manager considers that complying with the section 224C notice would detrimentally affect the exercise of its functions under the FSCS.

(6) The fifth ground is—

(a) that there is no undertaking from the manager of the relevant scheme not to bring proceedings against the FSCS manager; or

(b) that the FSCS manager considers that the terms of any such undertaking are unsatisfactory.

(7) The sixth ground is—

(a) that there are no arrangements for the reimbursement of any expenses incurred by the FSCS manager in connection with any proceedings brought against it in respect of its relevant scheme functions (including expenses incurred in meeting any award of damages made against it); or

(b) that the FSCS manager considers that any such arrangements are unsatisfactory.

(8) In subsection (6) references to an undertaking of the kind mentioned there are to an undertaking not to bring proceedings in respect of the FSCS manager's relevant scheme functions except proceedings in respect of an act or omission of the FSCS manager that is alleged to have been in bad faith.

(9) In this section “proceedings” includes proceedings outside the United Kingdom.]